Guide

IRD kilometre rates 2025-26 NZ: tier 1 and tier 2

Updated October 2026 · 5 min read

For the 2025-26 income year, Inland Revenue's kilometre rates for motor vehicles use a two-tier method. Tier 1 applies to the first 14,000 km of total travel in the vehicle (the business portion of it), and covers both running costs and fixed costs. Tier 2 applies to the business kilometres above 14,000 km and covers running costs only. All rates are in NZD per kilometre and are set in IRD Operational Statement OS 19/04.

The rates at a glance

The 14,000 km Tier 1 limit is the total distance travelled by the vehicle in the income year, and it is per vehicle per income year, not per person and not reset per trip.

A worked example

You drove a petrol car 18,000 km during 2025-26, all of it for business. The first 14,000 km are claimed at Tier 1 and the remaining 4,000 km at Tier 2:

14,000 × $1.20 + 4,000 × $0.37 = $16,800 + $1,480 = $18,280 deductible.

With private use as well, Tier 1 covers only the business share of the first 14,000 km the car travelled, so the split moves. The calculator below assumes every kilometre is business. The 2026-27 rates are published after 31 March 2027.

Work out your claim

Enter your work kilometres and pick your vehicle type.

You must keep a record of your business kilometres

The kilometre rate method spares you from adding up every fuel and maintenance receipt, but IRD does require you to be able to show how you worked out your business kilometres: a logbook or equivalent record of your business travel. A rough estimate does not survive a review; a dated record of actual trips does.

For a past year, the closest thing to a logbook you may already have is your Google Maps Timeline, which recorded every drive with GPS timestamps and distances. To turn it into a record:

1. Export your Timeline from your phone (see the Timeline export guide).
2. Open the file in Time-mile: your Timeline file is read in your browser and never uploaded.
3. Filter to the income year and your business trips by date and activity type.
4. Export a CSV to total your business kilometres, or a PDF report as your supporting record.

For an IRD logbook, keep it as it runs. The logbook that sets your business-use share covers at least 90 consecutive days, then serves up to three years while that share moves by less than 20%. Time-mile can keep it for you: choose the IRD scheme, open a logbook, then import a fresh Timeline export every week and confirm that week's trips with their purpose. The PDF carries the odometer readings and the date each entry was made. It comes with the subscription for the year in progress.

Official sources

• IRD: Kilometre rates 2025-2026
• IRD: Operational Statement OS 19/04: kilometre rates

The full dated history of these figures, each read at the authority that published it: IRD kilometre rates on lexrates.

Frequently asked questions

What are the IRD kilometre rates for 2025-26?

For 2025-26, IRD uses a two-tier method. Tier 1 applies to the first 14,000 km and covers both running and fixed costs; Tier 2 applies to business kilometres above 14,000 km and covers running costs only. For a petrol car the rates are $1.20/km at Tier 1 and $0.37/km at Tier 2.

What is the difference between Tier 1 and Tier 2 kilometre rates?

Tier 1 applies to the first 14,000 km of total travel and covers both running costs and fixed costs. Tier 2 applies to the business kilometres above 14,000 km and covers running costs only.

How many kilometres can I claim at the Tier 1 rate?

The Tier 1 rate applies to the first 14,000 km of total travel by the vehicle in the income year. This limit is per vehicle per income year, not per person and not reset per trip.

Do I need a logbook to claim vehicle expenses in New Zealand?

The kilometre rate method spares you from adding up every fuel and maintenance receipt, but IRD requires you to be able to show how you worked out your business kilometres with a logbook or equivalent record of your business travel.

Can I use Google Timeline as a logbook for IRD?

Not after the fact: an IRD logbook covers at least 90 consecutive days and is kept while they run. Time-mile keeps one from your Timeline, week by week, with the odometer readings and the date each entry was made. For a period already past, your Timeline still backs your business kilometres as a dated record of actual trips, processed in your browser.